If you cut taxes so much that everybody pays less there'd be no welfare, no public schools, healthcare etc and the poor would be paying far more of the share that is paid than all the rest and still have to fork out for those things privately. In other words they'd be screwed.

You don't get it. Part of what he believes is that this is fair. The other part of what he believes is that if the rich get to 'keep' more of what they 'earn', productivity and wealth will suddenly increase so dramatically that the rich will suddenly offer all poor people jobs, and also give all their 'extra' money voluntarily to charities that will take care of everything else.

You don't get it. Part of what he believes is that this is fair. The other part of what he believes is that if the rich get to 'keep' more of what they 'earn', productivity and wealth will suddenly increase so dramatically that the rich will suddenly offer all poor people jobs, and also give all their 'extra' money voluntarily to charities that will take care of everything else.

Talk about misguided utopian ideals!

Why is 'earn' in quotes? That probably tells us all a lot about your mindset. The rest tells us a lot about your mindset as well.

So do you or do you not support the rich paying more in taxes? If you support a flat rate you do. Do you really want to steal from the rich?

If you don't, what amount would you like to see set? Maybe everyone pays $15,000 with no deductions?

I don't support the rich paying more in the current system. As for how much they should pay, I think we could have--and I'm just throwing this number out there--a tax of 10% with no deductions on everyone above the poverty line (we could debate what it should be, if any, for people that earn less). From there, I think it's reasonable to have graduated "super rich" tax. Say another 1% on those over one million, and an additional 1% on those making over $5,000,000 (or whatever...you get the concept.

Taxing them more in the current system is utterly stupid, ineffective and detrimental.

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Originally Posted by tonton

You don't get it. Part of what he believes is that this is fair. The other part of what he believes is that if the rich get to 'keep' more of what they 'earn', productivity and wealth will suddenly increase so dramatically that the rich will suddenly offer all poor people jobs, and also give all their 'extra' money voluntarily to charities that will take care of everything else.

Talk about misguided utopian ideals!

That's obviously exaggerated. What I'm saying is that the "rich" already pay the lion's share of the taxes. "Rich" includes small business in many cases, and the bulk of the middle and upper ""consumer classes." Taxing the rich more does not make anyone richer, it only makes them poorer. So in that vein, taxing them more for redistribution (which I oppose wholeheartedly) fails in itself.

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Originally Posted by MJ1970

Why is 'earn' in quotes? That probably tells us all a lot about your mindset. The rest tells us a lot about your mindset as well.

There you go. Two competing philosophies. When you look at money like say, Michael Moore does, you think that money is a natural resource and that the rich have stolen it from everyone else. The end goal is to solve the issue of "income inequality." Of course, this is impossible through taxation. All these policies of theirs (liberal, socialist-progressives) do is make everyone more poor...with the exception of Uncle Sam.

I can only please one person per day. Today is not your day. Tomorrow doesn't look good either.

I have a million dollars. I give it to a fund manager, who gets me a return of $50,000 a year on it (minimum). The whole process took me about two hours a day for a week to research and to arrange, and one hour a week afterward to monitor.

My son's history teacher works 30 hours a week in the classroom and 30 hours a week for preparation and grading, and earns $30,000 a year.

I don't support the rich paying more in the current system. As for how much they should pay, I think we could have--and I'm just throwing this number out there--a tax of 10% with no deductions on everyone above the poverty line (we could debate what it should be, if any, for people that earn less). From there, I think it's reasonable to have graduated "super rich" tax. Say another 1% on those over one million, and an additional 1% on those making over $5,000,000 (or whatever...you get the concept.

Taxing them more in the current system is utterly stupid, ineffective and detrimental.

That's obviously exaggerated. What I'm saying is that the "rich" already pay the lion's share of the taxes. "Rich" includes small business in many cases, and the bulk of the middle and upper ""consumer classes." Taxing the rich more does not make anyone richer, it only makes them poorer. So in that vein, taxing them more for redistribution (which I oppose wholeheartedly) fails in itself.

There you go. Two competing philosophies. When you look at money like say, Michael Moore does, you think that money is a natural resource and that the rich have stolen it from everyone else. The end goal is to solve the issue of "income inequality." Of course, this is impossible through taxation. All these policies of theirs (liberal, socialist-progressives) do is make everyone more poor...with the exception of Uncle Sam.

So you'd roughly cut income tax revenue from $1,090,000,000,000 to $550,000,000,000. 54% of the $1.09 trillion currently goes to defense spending. I guess given your not big on military spending cuts you'll just cut nearly everything else entirely and to hell with paying off the debt too.

Oh but wait... you'll argue it'll bring in more revenue, so the government will have more money! Good luck with that one.

"Islam is as dangerous in a man as rabies in a dog"~ Sir Winston Churchill. We are nurturing a nightmare that will haunt our children, and kill theirs.

I have a million dollars. I give it to a fund manager, who gets me a return of $50,000 a year on it (minimum). The whole process took me about two hours a day for a week to research and to arrange, and one hour a week afterward to monitor.

My son's history teacher works 30 hours a week in the classroom and 30 hours a week for preparation and grading, and earns $30,000 a year.

I have a million dollars. I give it to a fund manager, who gets me a return of $50,000 a year on it (minimum). The whole process took me about two hours a day for a week to research and to arrange, and one hour a week afterward to monitor.

My son's history teacher works 30 hours a week in the classroom and 30 hours a week for preparation and grading, and earns $30,000 a year.

Who actually EARNED the money?

Read "Rich Dad, Poor Dad." The idea is to make money work for you, as you do (apparently). Working for money is what keeps us poor. I myself am in the process of changing my view of my personal financial picture. It's another topic, but related.

I can only please one person per day. Today is not your day. Tomorrow doesn't look good either.

So you'd roughly cut income tax revenue from $1,090,000,000,000 to $550,000,000,000. 54% of the $1.09 trillion currently goes to defense spending. I guess given your not big on military spending cuts you'll just cut nearly everything else entirely and to hell with paying off the debt too.

Oh but wait... you'll argue it'll bring in more revenue, so the government will have more money! Good luck with that one.

I don't see where you get that number. Remember, I was just throwing that 10% number out there. It might be more or less. I know that as someone who earns over $100,000 a year in conjunction with my wife, my effective rate is almost always 10 or 11%. Imagine if the government made this tax unavoidable.

Speaking of unavoidable taxes, this is why some kind of consumption tax is better than an income tax. You exempt food, clothing and shelter to compensate for people who are lower income. You eliminate punishing success...you incentivize it. And you make that rate enough to cover expenses. Of course, all this comes while cutting spending.

And speaking of THAT, I do support reductions in military spending, or at least freezing costs as much as possible. We need to reorganize military bases and consolidate. We have over 700 foreign bases. That needs to be cut in half, at least. I don't support drastic cuts in military spending, but yes...some are necessary.

Of course, military spending is not the major reason we're in this situation, nor was it the reason for the recession. We spent a trillion dollars on a stimulus and vastly expanded many government department budgets. Federal employees now make far more than there private sector counterparts, for example. And of course, we need to reform Social Security and Medicare to make them sustainable.

I can only please one person per day. Today is not your day. Tomorrow doesn't look good either.

Read "Rich Dad, Poor Dad." The idea is to make money work for you, as you do (apparently). Working for money is what keeps us poor.

Exactly!

The differences between the rich and poor have more to do with things like moving income away from wages to other forms (partly due to the income tax burden...but for other sensible economic reasons as well)...having a long term view vs. a short term view...deferring present consumption (saving and investing) vs. consuming all present income and more (debt).

The guy who invested his money in tonton's scenario first earned this money from some source (perhaps a job) saved some of it (deferred consumption for a time) and then lent this money to others who desired or needed it now. Time preference is a huge factor in the difference between the rich and the poor.

The differences between the rich and poor have more to do with things like moving income away from wages to other forms (partly due to the income tax burden...but for other sensible economic reasons as well)...having a long term view vs. a short term view...deferring present consumption (saving and investing) vs. consuming all present income and more (debt).

The guy who invested his money in tonton's scenario first earned this money from some source (perhaps a job) saved some of it (deferred consumption for a time) and then lent this money to others who desired or needed it now. Time preference is a huge factor in the difference between the rich and the poor.

Yup. I just read that book, and I believe it may change my financial life. It's like I woke up one day and realized "I don't own any real assets other than my retirement and college savings." The author, Robert Kiyosaki writes about exactly what you're mentioning...passive and portfolio income rather than wages. I even found a copy of his "Cashflow" board game. I am quite serious about this...my whole outlook had changed.

But that outlook is quite different than what tonton presents. If one takes the view that people can only "earn" money through work, it's easy to be angry about income inequality and "unfairness." Even before my recent revelation, I took a different view...I just didn't know how to get there. Two different world views, I suppose.

I can only please one person per day. Today is not your day. Tomorrow doesn't look good either.

Of course. Would you say those costs don't include salaries and benefits?

Now, don't respond with a question. I'm not going to answer any more of your questions until you answer some of mine. How does the free market deal with monopoly, collusion, market manipulation, supply constraint, monopsony and non-transparency?

You lack consistency. If you yourself would not steal from your neighbor, why do you approve of other people (government) stealing from your neighbor for you?

Because it's not theft. It's funding services given to you, including maintenance of the very system which allows you to profit through investment. Take away the rule of law, take away enforcement (of property rights, for instance -- something dear to your heart), take away poverty avoidance measures, and the system you profit from as an investor collapses.

Of course. Would you say those costs don't include salaries and benefits?

Now, don't respond with a question. I'm not going to answer any more of your questions until you answer some of mine. How does the free market deal with monopoly, collusion, market manipulation, supply constraint, monopsony and non-transparency?

In a truly free market, all of those things you listed either would not exist or would be bad for business.

The focus would be on pleasing the customer, not "gaming the system" (because there would be no system - at least not one that involved government aggression).

You don't please your customer by charging him excessively for a product or service.

Monopolies wouldn't exist because people would be allowed to start their own businesses and compete.

If you are found to be cheating your customers or are providing substandard products/services at unfair prices, your customers would go elsewhere and you would be allowed to fail.

Because it's not theft. It's funding services given to you, including maintenance of the very system which allows you to profit through investment. Take away the rule of law, take away enforcement (of property rights, for instance -- something dear to your heart), take away poverty avoidance measures, and the system you profit from as an investor collapses.

Threatening someone with imprisonment or bodily harm unless they give you money is most certainly theft. More like armed robbery.

The focus would be on pleasing the customer, not "gaming the system" (because there would be no system - at least not one that involved government aggression).

Sorry, but this is incorrect. The focus would be on making money. If abusing the system helps to make more money, the system will be abused.

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You don't please your customer by charging him excessively for a product or service.

But you sure can get more money out of them. Do you think Microsoft got where it did by pleasing the customer? Do you think they shouldn't have been censured for their business practices? Do you think that had they not been censured by courts and governments, they would have lost market share from consumer action?

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Monopolies wouldn't exist because people would be allowed to start their own businesses and compete.

Wrong again. A monopoly can easily crush a challenger, through supply constraint, out-marketing, and acquisition. Imagine if Microsoft could have gotten away with buying Apple in the nineties.

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If you are found to be cheating your customers or are providing substandard products/services at unfair prices, your customers would go elsewhere and you would be allowed to fail.

Sorry, but this is incorrect. The focus would be on making money. If abusing the system helps to make more money, the system will be abused.
But you sure can get more money out of them. Do you think Microsoft got where it did by pleasing the customer? Do you think they shouldn't have been censured for their business practices? Do you think that had they not been censured by courts and governments, they would have lost market share from consumer action?

Wrong again. A monopoly can easily crush a challenger, through supply constraint, out-marketing, and acquisition. Imagine if Microsoft could have gotten away with buying Apple in the nineties.

Not if there's nowhere else to go.

Microsoft has gotten where it is through government intervention in the free market.

I'm on the fence on the intellectual property issue. Have you read any Stephen Kinsella? He's kind of the modern intellectual center of the libertarian anti-intellectual property movement. Some of what's he's written is pretty compelling and convincing. I'm still digesting it all though. I think Lysander Spooner also wrote on this though I have not read his stuff on that subject.

There is no law that prevents anyone from living below their means to save and invest nor any law that prevents upward mobility.

P.S. And unwilling is just fine too. It sometimes simply reflects a different set of choices. We ought not assume that everyone who is not (financially) rich is not so because they can't be. Some folks just don't want to make the various sacrifices that may be necessary to move up in the organization or to move up on the wealth scale. They are content and happy where they are...and sometimes with good reasons.